Transit Coverage

Transit coverage is a form of inland marine insurance that protects a business's own property against physical loss or damage while it is in transit between locations. Because standard commercial property policies largely stop covering property once it leaves the described premises, transit coverage (sometimes called a transportation floater) fills the gap for goods, equipment, tools, samples, or stock moving by the insured's own trucks, a common carrier, or a contract carrier. It is written on an "all-risk"/special-causes-of-loss basis in most cases, responding to perils such as collision, overturn, fire, theft, and often loading and unloading — following the property door to door rather than being tied to one address.

The single most important distinction for a small-business buyer is transit coverage versus motor-truck cargo liability. Transit coverage is first-party: it pays the owner directly for damage to the owner's goods regardless of fault. Motor-truck cargo insurance is third-party liability: it responds when a for-hire trucker is legally liable for someone else's freight in their care, custody, and control. A manufacturer shipping its own product needs transit coverage; a for-hire carrier hauling a customer's product needs cargo liability. Buying the wrong one leaves either the shipper or the trucker with an uncovered loss, and the two are frequently confused because both attach to goods on a truck.

In practice, transit coverage is scheduled by describing the type of property, a per-shipment or per-conveyance limit, and often a catastrophe limit for goods at a terminal or in a single vehicle. Buyers should confirm the valuation basis (selling price versus cost versus replacement cost), whether theft and unattended-vehicle losses are covered, and any packing or securement warranties. Businesses that regularly move high-value equipment or inventory — contractors, distributors, dealers, and e-commerce shippers — use transit coverage together with an installation floater or fine-arts floater so their property is protected at every point between purchase and final delivery.